Assessee had advanced loan from its interest free funds and had not charged any interest, that the assessing officer had taxed notional interest in the hands of the assessee without bringing any evidence of charging of interest by the assessee. He has also not explained as to how the interest income accrued to the assessee. In the normal course of its business transaction the assessee had advanced loan and had not charged any interest. Charging or not charging of interest is a discretion of an assessee- especially when the advance is made out of interest free funds. We are of the opinion, that the order of the FAA does not suffer from any legal infirmity.

If an assessee had not claimed any expenditure then there was no scope of dis allowance U/s. 14A

It is apparent from plain reading ofsection 14A that dis allowance under the section can be made only when deduction of expenditure is claimed and the dis allowance cannot exceed the expenditure claimed. Since assessee had not claimed any expenditure then there was no scope of dis allowance.